Winning Bizness Desk

Mumbai.U.S. President Donald Trump has announced a 25% tariff on imported cars starting April 1. Following this decision, Tata Motors' stock plunged by 6%, while General Motors and Stellantis (Jeep & Chrysler's parent company) also saw declines of 3% and 3.6%, respectively.

Jaguar Land Rover (JLR), owned by Tata Motors, will be directly affected by this tariff. In FY 2024, JLR sold 400,000 vehicles globally, of which 88,000 (22%) were sold in the U.S. The company primarily manufactures its cars in the U.K. The U.S. imported nearly 8 million cars last year, highlighting the significant impact of the new duty.

Canada, EU React Strongly

Canadian Prime Minister Mark Carney criticized the move, calling it "a direct attack" and pledged to protect Canadian workers and businesses.

European Commission President Ursula von der Leyen also condemned the decision, stating that tariffs hurt businesses and are even worse for consumers.

Trump's Justification: America First

Trump claims this policy will boost U.S. manufacturing, forcing companies to build cars and auto parts domestically. According to the White House, the tariff is expected to generate $100 billion in additional annual revenue. Trump insists this measure is permanent and will prevent foreign countries from exploiting the U.S. market.

Impact on U.S. Car Prices

Currently, the average price of a new car in the U.S. is $49,000. Reports suggest that with the new tariff, the cost of imported vehicles could rise by $12,500 (approx. $10 lakh). This price surge may reduce sales and increase manufacturing costs, affecting global automakers.

Trump's 'Reciprocal Tariffs' on India & Other Nations

From April 2, Trump plans to impose reciprocal tariffs on all trading partners, including India. He claims that India charges over 100% tariff on U.S. goods, and he intends to retaliate with similar rates.

India conducts 17% of its foreign trade with the U.S., making this decision potentially damaging for sectors like agriculture, automobiles, and technology. The U.S. is India's largest buyer of fruits and vegetables, so any tariff hike could impact Indian exports.

India’s Tariff History & Adjustments

Historically, India had one of the highest tariff rates. In 1990-91, the average tariff was 125%, which reduced significantly post-liberalization. By 2024, India’s average tariff stood at 11.66%.

After Trump’s re-election, India adjusted its highest tariff rates:

• Luxury car duty reduced from 125% to 70%
• Highest tariff rate now capped at 70%
• India’s average tariff in 2025 dropped to 10.65%

Despite these reductions, India remains one of the highest tariff-imposing nations globally.